Finance director Jeff Spies has recommended that the City Council approve a resolution to terminate its securities lending agreement with Wachovia Global Securities.

Officials say Wachovia violated city investment policies and gambled taxpayer dollars in high-risk transactions without the consent of anyone in City Hall. The city has hired two outside law firms to determine whether the city has cause to sue Wachovia.

Terminating the contract could give city officials a better understanding of both their legal position and total losses, Spies said. The council will likely vote on the resolution May 7.

A recent St. Petersburg Times investigation of the city's securities lending practices found that city officials routinely ignored oversight procedures designed to protect against such losses. The oversight lapses spanned nearly a decade:

• For years, Mayor Rick Baker's staff neglected to provide the City Council with regular written financial reports as required by the city's investment policy.

• Last year, the City Council and the city's Investment Oversight Committee, groups designed to check and balance City Hall's authority, were left in the dark about some financial transactions until after decisions were made.

• Spies rarely mentioned anything about the securities lending account in his required quarterly financial reports — despite the fact that the program's annual returns fell below the expected $160,000. From 2002 to 2008, the city earned a total of $993,056 from securities lending.

But even as city officials consider terminating the securities lending contract, officials have been reluctant to criticize the program. The city's overall investment portfolio has been successful, they argue.

"Over the last decade we made money every year," said council member Karl Nurse. "It is ridiculous to look item by item and say, 'Well, I want to bust your chops for losing money on this and this, and by the way I am not going to mention the part where you made money.' "